The latest on California politics and government

May 29, 2012

The Assembly passed hotly contested legislation Tuesday to regulate and restrict how money generated by California's new "cap-and-trade" program of marketing carbon emissions can be spent.

Assembly Speaker John A. Pérez carried the measure, Assembly Bill 1532, which passed by a vote of 47-26.

The bill marks a major step toward implementing "cap and trade," which places a limit on various pollution generators but allows that cap to be exceeded through the purchase of credits from businesses that fall below their cap.

The program stems from Assembly Bill 32, pushed in 2006 by then-Gov. Arnold Schwarzenegger and former Assembly Speaker Fabian Núñez to require California to reduce greenhouse gas emissions to 1990 levels by 2020.

AB 1532 would apply to an estimated $1 billion expected to be generated from cap-and-trade auctions in 2012-13. Revenues are expected to grow significantly in future years.

AB 1532 would authorize funds generated by the auction of "cap and trade" credits to be spent on projects promoting clean energy, low-carbon transportation, natural resource protection, and for research, development and deployment of innovative technologies to promote cleaner air.

Pérez's legislation also would require the state Air Resources Board to develop an investment plan for the auction revenues every three years. The Legislature would review and could change the ARB plan before adoption.

Republicans blasted AB 1532 as a new blow to California businesses that have been hit hard by a rocky economy.

The California Chamber of Commerce is among the measure's opponents.

"Businesses are taking this as an attack," said Assemblyman Tim Donnelly, R-Twin Peaks.

"This is a massive mistake, and this is a movement in the wrong direction," Donnelly said.

Pérez countered that the state already is committed to cap and trade to reduce greenhouse gases, so AB 1532 does not impose new economic pressures on businesses but simply regulates the spending of revenues generated from pollution auctions and gives lawmakers more control over future projects.

"If you would like to bury your head in the sand and say, 'I do not want to be involved in actually governing the state of California in what we do in these areas,' you should vote no," Pérez said.